The Institute of Chartered Accountants of India ( ICAI ) is set to discuss revisions to guidelines concerning the merger and demerger of CA firms at its upcoming meeting in July.
We have released the exposure draft. It is scheduled for consideration at the next council meeting in July, stated Ranjeet Kumar Agarwal, president of ICAI, on Saturday.
A committee focusing on CA firm mergers has recently issued a draft of the guidelines earlier last month.
Read More: ICAI releases Exposure Draft on proposed Merger & Demerger Guidelines, invites Public Comments
A significant proposal includes eliminating the five-year time limit for firms to demerge and reclaim their original trade or firm name.
This adjustment aims to foster consolidation among CA firms amidst a competitive landscape and enhance their operational standards.
Agarwal emphasised that a substantial number of CA firms currently operate on a small or medium scale, needing to adapt to future demands.
These firms need to specialise across various domains. A single firm may not adequately manage the entire audit of an organisation. Therefore, firms must scale up to enhance their capacity, explained the ICAI president.
We propose eliminating the five-year time limit to facilitate sustainable mergers, he added.
Over the weekend, ICAI hosted an international conference for chartered accountancy students in Calcutta.
Last month, the Supreme Court upheld ICAI’s decision to impose a maximum ceiling of 60 tax audits per financial year for individual CAs, meaning a firm with four chartered accountants can undertake up to 240 tax audits annually.
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